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08.09.09

Microsoft Workforce to Shrink by Another 2,000 or More

Posted in Deals, Finance, Marketing, Microsoft at 11:24 am by Dr. Roy Schestowitz

Sunken ship

Summary: Microsoft sells Razorfish

THIS was more or less expected [1, 2, 3, 4, 5], but now it is official.

French advertising company Publicis Groupe SA has agreed to acquire Microsoft Corp.’s digital ad firm, Razorfish, in an effort to grab more of the ad dollars that are flowing to the Web.

Some people misinterpret the story, which shows Microsoft getting smaller and reaching out for money now that it's also borrowing money. This whole thing counts as either Microsoft chopping a division or laying off staff; it is just organised differently and it bodes negatively for Microsoft, no matter how much lipstick they put on the pig.

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7 Comments

  1. Needs Sunlight said,

    August 9, 2009 at 2:19 pm

    Gravatar

    How can this detritus be re-tooled to be turn around and become assets to society? They shown that any technology jobs are out, possibly for life, but some there must be some jobs without computers where these failures can be placed.

  2. Roy Schestowitz said,

    August 9, 2009 at 2:38 pm

    Gravatar

    How can this detritus be re-tooled to be turn around and become assets to society?

    Razorfish staff was actually a misfit at Microsoft. They were deploying GNU/Linux and Apache for customers.

    aQuantive’s boss quit Microsoft last year.

  3. The Mad Hatter said,

    August 9, 2009 at 8:02 pm

    Gravatar

    Expect Microsoft to dump more divisions over the next 4 quarters, as revenue and profits continue to drop, in part due to the recession being deeper than forecast, and in part due to Linux being extremely competitive in certain applications (cell phones for example).

    Also look for Apple to maintain or increase sales, and to maintain or increase profits, due to actually selling something that the customer wants…

    Roy Schestowitz Reply:

    That’s partly marketing and perception. People are also told what they want (PR art).

    Also see: “Microsoft unloading big chunk of jobs through sale of Razorfish”

  4. Chips B. Malroy said,

    August 10, 2009 at 8:41 pm

    Gravatar

    While you are looking at the fact that MS is selling Razorfish and shedding 2000 employees, there is something even bigger about this deal

    http://www.eweek.com/c/a/Windows/Microsoft-Razorfish-Deal-Shows-Strategic-Shift-266177/?kc=rss

    Quotes from the above link:
    “Microsoft originally purchased Razorfish as part of a $6 billion acquisition of aQuantive in 2007″
    “Other properties in aQuantive’s stable included Atlas, which offered advertising and publishing tools, and DrivePM, which matched ad campaigns to publisher inventory. ”
    “With the $530 million deal, announced Aug. 9, Razorfish joins other Microsoft properties that have been sold or eliminated over the course of the summer.”
    —————————————————————————————————-
    Its obvious that MS lost a fair amount of money on Razorfish and was cutting its ongoing loses. The question, is, which is hard to answer, is how much really did MS pay for it, as it was only a part of the aQuantive package. But it seems that it did lose a fair chunk of change in this deal. But whats a couple of billion here or there, if you are MS.

  5. The Mad Hatter said,

    August 11, 2009 at 10:51 am

    Gravatar

    That’s partly marketing and perception. People are also told what they want (PR art).

    It’s also better hardware. I’ve heard that a lot of the Kernel programmers use Apple hardware (running Linux). Apple makes very nice hardware, very nice indeed, so it’s not all PR. And OSX doesn’t suffer from malware the way Windows does. That’s also true.

    I’d rate Apple’s ads as fairly honest. You get what they say you are getting as far as hardware and software are concerned. Unlike Microsoft ads…

    As to Microsoft having money, well technically the do (in accounting terms). The question is, are the accounting methods used correct? What I mean by that, is that there are Generally Accepted Accounting principles. You can follow these principles and still hide things. It’ appears that the Americans still haven’t learned from Enron, Global Crossing, etc. in that the legislation that would have closed a lot of loopholes was partially gutted. While I have no doubt that the numbers which were reported are correct ACCORDING TO THE LAW that doesn’t mean that the law is effective.

    Maybe they have the money stated. Maybe they don’t, and they are using the accounting rules to make it look like they do. I don’t know. To know, I’d have to be their accounting firm.

    But the speed with which they are shedding properties is suspicious, so I’m starting to lean towards your interpretation Roy.

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